Sensex jumps nearly 700 pts, Nifty reclaims 23,550 after Trump delays tariffs; IT, bank stocks gain

In the broader market, both BSE Midcap and BSE Smallcap were up almost by a percent.

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After having fallen for the past two sessions, Sensex and Nifty opened higher on February 4 tracking gains across Asian markets after the U.S. temporarily halted planned tariffs on Canada and Mexico, easing fears of a full-blown trade war. However, with tariffs on China still set to take effect, volatility remains a key theme. Domestically, all eyes are now on the RBI's policy decision on February 7.

At 9.45 AM, the Sensex was up 697 points or 0.9 percent at 77,884, and the Nifty was up 204 points or 0.9 percent at 23,565. About 2,312 shares advanced, 670 shares declined, and 127 shares remained unchanged.

U.S. President Donald Trump's last-minute decision to delay tariffs on Canada and Mexico for 30 days, in exchange for commitments on border security and crime enforcement, offered some relief to Asian markets. However, tariffs on China are scheduled to kick in at 10:31 AM, keeping investors on edge. Wall Street struggled overnight but pared early losses after the announcement.

"Given the ongoing uncertainty around U.S. tariffs, volatility is expected to remain high in the short term. The unpredictability of tariff decisions—whether they are imposed or delayed—adds to market uncertainty," said Ruchit Jain, Vice President of Motilal Oswal Financial Services.

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Following Budget 2025 on February 1, benchmark indices have slipped for two sessions or 0.5 percent as global trade concerns overshadowed gains in consumption-driven sectors boosted by personal tax cuts. "Post budget, market movements have been largely sector-specific, influenced by the finance minister's announcements. However, global factors, particularly U.S. tariff policies, are also playing a key role," he said.

In the broader market, both BSE Midcap and BSE Smallcap were up almost by a percent.

Mid- and small-cap stocks are yet to reach attractive entry levels, according to Jain. "A one to three-month consolidation phase is expected before any significant rally. However, for long-term investors, this correction presents a gradual buying opportunity over the next two to three months," he added.

Among sectoral indices, barring Nifty FMCG, which dipped 0.6 percent, the remaining 12 others traded in the green. IT and banking stocks led the gains in Nifty today. Colgate-Palmolive India, Hindustan Unilever, and United Breweries led the losses on the Nifty FMCG index, each falling by 1-2 percent.

The Nifty Auto index rose 1.5 percent as auto ancillary stocks Sona BLW and Samvardhana Motherson surged 7 percent and 8 percent, respectively, recovering all their losses from the previous session. The stocks had dropped over 8 percent on February 1 after U.S. President Donald Trump imposed a 25 percent tariff on goods from Canada and Mexico.

Also Read | DIIs all set to overtake FIIs in ownership race as gap narrows to record low

Bharat Electronics, Hindalco, ONGC, Tata Motors, and Infosys were the top gainers on Nifty 50 , rising 2-3 percent. Meanwhile, Trent, Power Grid, HUL, Nestle, and Britannia were the biggest losers, falling 1-3 percent.

With Sensex and Nifty still 10 percent below their all-time highs, Jain does not foresee a deep correction but expects a sideways or time-wise consolidation in the coming months.

The ongoing market correction is being driven by weak earnings, slowing growth, and persistent foreign outflows. So far in February, FIIs have offloaded Rs 5,285 crore worth of Indian equities.

Anand James, Chief Market Strategist at Geojit Financial Services, noted that despite multiple attempts, the downside marker at 23,190 held firm in the previous session, keeping the bullish stance intact. He expects Nifty 50 to face resistance at 23,440, 23,700, and 23,840. However, failure to sustain above 23,320 could weaken the market's upside momentum, he added.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.